Overpaying my Halifax mortgage

shjo558

Hi,

I have 22 years left on my Mortgage but plan to have it paid of in about 10 years. I have been consistently paying extra every month and thought that Halifax would recalculate my normal monthly payments after I had overpaid a certain amount.

Is that correct and does anyone know when I should expect this to happen?

beecher

Phone them up and ask. I was told I had to make sure that overpayments were classed as 'capital repayments' and now just save up and make bulk payments once a year or so. Before that I was told that the repayments I was making were just sitting in my account (don't know if that's true or not), but now I phone up the call centre, get them to put a tag on my account saying I'm making a capital repayment, and go into a branch with my cheque. Probably a long way for a shortcut, but it means that my payments are changed straight away.

daveybea

I have varying degree's of service depending on which branch I go in !
I always say it's a 'capital repayment' and the branch should send an email on their screen to head office at the same time. They have calculated the reduction in mortgage time wrongly on a couple of occasions and I have pointed that out and got it corrected by phone. You should receive a letter within seven days of your overpayment detailing your balance outstanding and the reduction in period. Keep a close eye on them !

It's worth noting that most Halifax mortgages are charged interest on a daily basis so you are not saving anything by keeping it in your bank unless the interest is good! I am overpaying as much as I can as I forsee interest rates going up back end of next year.

shjo558

I just make my payments via online banking so will phone them up to find out if they're being classed as capital repayments.

Doesn't sound like it though:mad:

daveybea

It's no problem but the money just sits in limbo in your mortgage account doing nothing ! Do keep a close eye on them !

Comyface

daveybea wrote: »

It's no problem but the money just sits in limbo in your mortgage account doing nothing ! Do keep a close eye on them !

The money's not in limbo, though. As you said in your other post, most Halifax mortgages are now daily interest, so any overpayments go straight off your debt and you're charged less interest the following day.

Then, if your monthly payments aren't reduced, part of your regular monthly payment becomes an overpayment which also reduces what you owe quicker and the interest you're charged on it.

To answer the original question by the OP, Halifax will change your monthly payment when you ask them to after an overpayment (or you can ask them to reduce the term), or if there's an interest rate change to your mortgage so that they calculate your new monthly payment based on what you should be paying them.

shjo558

Thank you:D

I have a tracker mortgage so the overpayments should have been taken into account with all the interest changes then.

daveybea

Unless it's specifically targeted - the money will be in the account but not necessarily doing what you want i.e coming off the interest on the mortgage and not the capital sum on which the interest has been charged. You do have to be specific when you make a mortgage overpayment with the Halifax.

Comyface

shjo558 wrote: »

Thank you:D

I have a tracker mortgage so the overpayments should have been taken into account with all the interest changes then.

Yes, that's right. And your overpayments since April will still be reducing what you owe daily and be taken into account when calculating your new payment at the next interest rate change.

Davey (or Tray? ) any overpayments do come off the capital. I work for the Halifax as a mortgage advisor so I know this.

daveybea

Comyface -It's Davey ! Tracey uses my account more now! I understand what your saying regards capital repayments - however my experience of Halifax overpayments hasn't been rosy with me having to ring up and get them to ammend the number of months I have reduced the term by on a couple of occasions. It's well worth using the mortgage overpayment programme on 'this much i know' to check your overpayment.

Comyface

daveybea wrote: »

Comyface -It's Davey ! Tracey uses my account more now! I understand what your saying regards capital repayments - however my experience of Halifax overpayments hasn't been rosy with me having to ring up and get them to ammend the number of months I have reduced the term by on a couple of occasions. It's well worth using the mortgage overpayment programme on 'this much i know' to check your overpayment.

Oh, I see what you mean now Davey. Yes, your term won't be amended unless you request it (although your overpayments do come off your capital IYSWIM).

I think we do agree with each other after all!